Merkel Should Solve the Euro Crisis: Ex-Deputy Chancellor

Joschka Fischer, former vice-chancellor of Germany blasted Chancellor Angela Merkel for not being prepared to solve the euro zone crisis, should the June 17th Greek elections produce a non-bailout vote.

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German Chancellor Angela Merkel

Two polls ahead of an official banon publication of opinion surveys before the election showed contradictory results, with one predicting the victory of conservative party New Democracy, which supports the country's commitment to reforms under its bailout program and the other showing radical, anti-bailout Syriza leftist party ahead.

"In that case, governments must give guarantees, especially Germany. But can Angela Merkel do that? I don’t think Germany, and especially the coalition government, are prepared for that scenario at all," Fischer told CNBC at the SwissMediaForum.

However, Fischer agrees with Merkel on one aspect: Greece should stay in the euro zone. This is as far as their common ground goes.

Fischer proposes for Europe to alleviate Greece's debt burden further and says a haircut would also make sense for Spain, though at a much bigger scale.

"There is no way around a transfer union and Eurobonds. There must be a 'Europization' of debt". And after that, Europe must help Greece in rebuilding its economy and promote growth," he said.

Even if Greece were to exit the euro zone, Fischer pointed out that Europe will never be able to leave the country behind as, once you are a member of the European Union, you will always be part of it.

For Greece, an exit means it will "go under," according to Fischer, who added: "The problem is: It is not a company, which can simply go bankrupt and enter insolvency proceedings. No. If a country goes bankrupt, the country is still there the next morning. So are its strategic, geopolitical position and its people."

In terms of reverberation on the rest of the world, one thing is clear, according to Fischer: U.S. President Barack Obama can forget about being re-elected if the euro collapses, as a collapse will have a massive impact on the world economy, not just on the Greek economy.